SNN’s Robert Kraft spoke with Mark Osterberg, Ph.D., newly minted President and COO of Star Mountain Resources to discuss the company’s recent transformation, modified project generator business model and what’s in store for Star Mountain in 2015-16.

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Thursday, March 05, 2015

Star Mountain Resources, Inc. (OTCQB: SMRS)is a precious metals mining company. Star Mountain’s strategy is to discover, acquire, develop, and operate low-cost mining operations that will produce long-term cash flow, provide opportunities for growth through continued exploration, and generate superior and sustainable returns for our stakeholders, according to the company’s website. The company is currently evaluating their Star Mountain prospect located in the historic Star Mountain mining district, Beaver County, Utah.

Stock News Now: I remember Star Mountain was formerly called Jameson Stanford Resources. Let’s start off with an overview of Star Mountain Resources. What has changed?

MO: The old Jameson Stanford Resources company attempted to operate mines without performing or completing the step-by-step processes of exploration and development. It didn’t work. The board recovered the company, rolled it back, cleaned it up and set up the new company. We have a core group of investors who participated in frank and serious discussion during that process, and have fully bought into the new strategy laid out for Star Mountain Resources.

Stock News Now: As it says on your website, Star Mountain is, “focused on acquiring and consolidating mining claims, mineral leases, producing mines, and historic mines with production and future growth potential identified through our exploration efforts.” Can you go into detail about the company’s strategy? Would you say your business model is both exploration and project generator?

MO: Briefly stated, we intend to identify and then acquire quality projects and properties, explore them through discovery and initial development, and then seek senior partners to manage the capital-intensive phase of development and operation. In detail, our business model is a modification of the prospect generator model. That business model results from a partnership between my old consulting firm, Mine Mappers and the investor-focused financial expertise that founded Star Mountain Resources and brings together seasoned, experienced, well-trained geologists and top flight financial expertise under the same organizational roof. We do not intend to act as the “outsourced” exploration department for one or two clients but we seek to acquire quality projects that can be evaluated on their own technical and financial merit.

We believe outstanding opportunity exists right now in the mining business to acquire by purchase or merger, quality projects with some resources already identified. We also believe that outstanding opportunity exists right now to find our own new projects.

Stock News Now: Your website also states that you’re focused in the Star Mountain Mining District, Beaver Country, Utah. What’s the history behind this mining district?

MO: We control some 117 unpatented mining claims and two state sections in the Star Mining District and we will systematically evaluate their mineral potential in the first half of 2015. Work done on the project by the old Jameson Stanford Resources company was, in our view, largely misdirected and ineffective. We intend to remedy that situation.

The district itself is dotted with old, historic mines dating from the late 1800’s. The geology is dominantly time-stratigraphic units, equivalent to the productive stratigraphic units of east central Nevada, cut by three, significant intrusive bodies. The historic mines were operated on small, replacement, vein and skarn deposits and we think the application of modern exploration tools, techniques and methods will help us discover significant new resources that will support modern mining.

We are pleased to be in southern Utah, one of the best mining jurisdictions in North America. Southern Utah is a very favorable for permitting and operating mines. In particular, the Star Mining District lies near rail lines and roads with access to national and international goods and products. The climate is mild and amenable to any mining methodology. The normal activist communities associated with Colorado, Arizona and California are substantially underrepresented. The operations of CS Mining, immediately adjacent to the project area are proof that small scale, open pit mining operations can be successfully permitted and operated in Beaver

Stock News Now: What is managements’ background?

MO: I hold a Master of Science degree from the University of Minnesota, earned in the early 1980’s and a Ph. D. from the University of Arizona earned in 1990. Both degrees are straight economic geology. I worked for a number of years for major mining companies-both gold and copper and established Mine Mappers, a geological consulting business in 2001. I am keenly interested in the geology of ore deposits for their own sake but have become increasingly interested in the intersection of geology and mining economics. There’s a brief post on the Star Mountain Resources website page “Ask a Geologist” titled “Don’t forget: Geology is a Science” that nicely sums up my outlook.

Tom Bidgood, our chief consulting geologist, holds a Ph. D from the South Dakota School of Mines. Tom and I have worked together since the mid-1990’s when we were both attached to the operating mines exploration group at the old Cyprus Mining Company. After I left Cyprus for BHP, Tom ran the worldwide brownfields exploration effort for Cyprus, leaving them when Phelps Dodge acquired Cyprus in 1999. We’ve both been involved, along with our partners Jerry Willis, ex-Gold Fields Mining Corp, John Duncan and Chuck Turley in Mine Mappers since early 2001.

The business strategy behind Mine Mappers, and this is applicable to Star Mountain, was that too many geologists fell in love with the project they happened to be working on and forgot the goal was to define resources, determine grades and identify the metallurgical mineralogical characteristics so that a dollar value could be applied to the project. We felt there was a need for a group of highly trained, well-experienced geologists to do that type of work for mining companies and other organizations.

We are not going to forget that Star Mountain Resources is in business to make money, not to provide geological adventures for a group of would-be academics.

Stock News Now: Along those lines, with regard to your column, ‘Ask A Geologist’ – tell me more about this. And, I think our audience would be interested in the article recently published about ‘Skarn’ – could you elaborate and how does this affect Star Mountain?

MO: The “Ask a Geologist” geologist will generally be Tom Bidgood or me. I also intend to tap into the expertise available to us from colleagues and associates of both Tom and I as the need arises.

We believe one of the main target types at our Star Mountain district holdings is Cu-Au skarn. There are several inviting skarn targets on the project, all inadequately tested that demonstrate conclusively that good, skarn-forming processes were active and that the right geological environments are available to explore.

Stock News Now: How does management plan to execute the company’s business plan?

MO: We intend to start with a full evaluation of the holdings in the Star Mountain district. We’ll map, collect geochemical samples, run appropriate geophysical surveys as warranted, select drill targets and test them.

At the same time, we intend to actively pursue acquisition of promising prospects and projects elsewhere in North America, both raw discoveries and existing projects that meet our target criteria. We will use a “discoverability matrix” approach and account for geology, land availability, regulatory and permitting oversight requirements, and infrastructure advantage-disadvantage.

We also intend to leverage the increasing power of social media-we want to be up-front, open and transparent in our business practices. We’ve partnered with Ticker Media and will utilize their advice and assistance to communicate with investors and the public in a manner that non-geologists can understand. And I commit personally to avoiding geological and mining jargon that merely confuses and obfuscates.

Stock News Now: On February 18, the company announced you’ve been named President and COO of Star Mountain. How does that affect operations going forward

MO: This basic strategy was set out as part of the discussion, and hard work I might add, that took place during the rollback and cleanup of the old Jameson Stanford Resources company shell. That work was completed a month or so ago and my appointment was the planned first step in the execution of the new business strategy.

Stock News Now: What does 2015-16 have in store for Star Mountain?

MO: We’re going to find out if our Star Mountain mining district holdings have a potentially viable copper or gold deposit. We’re also going to do everything we can to prove to the investment community that we have the technical abilities and the financial wherewithal to build a company with legs.